Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Central Bank of India and Corporation Bank have significantly improved their ranking among Asian banks, taking advantage of reforms and retail boom, according to The Asian Banker journal.

About 31 Indian banks figure prominently among the top 300 Asian banks, after their profits rocketed 66 per cent during the last fiscal, according to the latest rating by the journal.

"The Indian banking sector is possibly the only one in the region that has exhibited clear signs of positive cyclical momentum. A robust retail market and structural banking reforms -- ranging from branch and manpower rationalisation to foreclosure and asset reconstruction legislations -- have begun to yield fruit," The Asian Banker said.

While the State Bank of India, with $78.88 billion in assets, was among the 30 largest banks in Asia, Corporation Bank emerged as the second strongest bank in the region, based on seven crucial financial parameters.

SBI, which was in the 26th position in terms of size, was followed by Bank of India (93), ICICI Bank (94), Punjab National Bank (110), Canara Bank (116), Bank of Baroda (132), Central Bank of India (154), Uco Bank (168), Union Bank of India (178) and Syndicate Bank (180). But in terms of financial strength, SBI was at 73^rd.

Corporation Bank outsmarted all public-sector and private banks to secure the second position among Asia's strongest banks.

Corporation Bank was followed by HDFC Bank, Jammu & Kashmir Bank and State Bank of Patiala, jointly at fifth position, and Andhra Bank and Oriental Bank of Commerce, both in the 9th spot.

Bank of India, PNB, Standard Chartered Bank India and UTI Bank were in the 15th place, while Bank of Maharashtra, Canara Bank, Federal Bank, State Bank of Travancore and Vijaya Bank were jointly at the 25th spot.

ICICI Bank, Indian Overseas Bank and Syndicate Bank were both at the 38th position.

Referring to SBI, the journal said, "The bank delivered growth in retail lending as part of efforts to restructure its loan operations. Bottomline expansion also flowed from cost cuts, including the voluntary retirement scheme implemented two years ago."

Lauding the soft interest regime pursued in India, it said "Banks, that were reluctant to lend to consumers before, are changing tune."

With loan-GDP ratio as low as 5-10 per cent in India in contrast to 70-150 per cent in developed nations, the journal said: "Consumer lending still shows extreme under-penetration."

The improvement in financial performance of Indian banks was also attributed to foreclosure and securitisation laws that enabled banks to reduce their non-performing assets, it said.

"The Indian banking sector is back on track. Thrust for future will continue to be in retail banking. The challenge for the banks is to sustain their financial strength, while at the same time improving quality of their assets," it added.